The latest 1upYours podcast has stirred up a lot of ruckus over the weekend after EGM's Shane Bettenhausen revealed that he has fairly reliable information that next week, Microsoft might announce the cancellation of a big first-party title. Speculations include Alan Wake, Banjo Kazooie 3, Fable 2 or Too Human. Remedy and Lionhead have already responded and said it is not their respective titles, so Too Human (which is currently over budget, overdue and in a lawsuit with Epic) or Rare's Banjo 3 (no news in a long time) are currently the prime candidates ....

As the Nov. 20 launch date for Bioware's sci-fi action-RPG Mass Effect draws nigh, Microsoft teams up with Sci-Fi TV channel for a 30-minute 'Sci vs. Fi: Mass Effect' special, sweepstakes, as well as premiering the two-hour extended episode of Battlestar Galactica: Razor in select movie theaters. A new micro-site was launched, and a soundtrack is now available for pre-order.

Revealed a few days ago, Microsoft unveiled new parental tools as part of the second year of the "Safety is no game. Is your family set?" campaign. The Family Timer will enable parents to set the appropriate amount of gaming and entertainment time on the X360 for their kids, on a daily or weekly basis.

Unlike the gloomy Sony news from earlier today, Microsoft's latest quarterly financial result reveals that its Entertainment and Devices Division (Games for Windows and Xbox branch) has turned its longtime red numbers into black. While its overall business keeps thriving, with a 27% revenue increase amounting to $13.76 billion, the games division came back from a $142M operating loss to close September with $165M profit, probably in no small part due to Halo 3's success.

Microsoft announced a plan for Halo development studio Bungie Studios to embark on a path to become an independent company, although Microsoft will retain an equity interest and own the Halo franchise, in addition to other future properties that Bungie may develop.

If, for any reason, you have a damaged Microsoft Xbox 360 disc and like to replace it, Microsoft will send you a replacement disc. This program is good only for X360 console owners in countries where Xbox 360 is sold at authorized retail locations. This program covers the Halo 3 Limited Edition Game Disc and Essentials Disc at no charge through 12/31/07.

While the official start of the Tokyo Game Show 2007 is not until next week, Microsoft got an early start with its pre-TGS Media Briefing, revealing various new titles, and plenty of assets from :

• 'Halo 3 (X360) - Screens
• 'Kingdom Under Fire: Circle of Doom (X360) - Screens
• 'Lost Odyssey (X360) Gets Delayed
• 'Project Gotham Racing 4 (X360) - Screens
• 'Viva Piñata: Party Animals (X360) - Screens
• 'Rez HD (XBLA) - Facts & Screens
• 'Omega Five' XBLA) Announced - Facts, Features & Screens
• 'Ace Combat 6: Fires of Liberation (X360) - Screens
• 'Apocalypse (X360) - Screens
• 'Assassin's Creed (PS3/X360/PC) - Screens & Artwork
• 'Beautiful Katamari (X360) - Screens
• 'Bladestorm: The Hundred Years War' (PS3/X360) - Screens
• 'Castle Shikigami III' (X360) - Screens
• 'Dark Sector' (PS3/X360) - Screens
• 'Devil May Cry 4' (PS3/X360/PC) - Screens
• 'Dynasty Warriors 6' (PS3/X360) - Screens
• 'Dynasty Warriors: GUNDAM' (PS3/X360) - Screens
• 'Guilty Gear 2 Overture' (X360) - Screens
• 'Infinite Undiscovery' (X360) Announced - Screens
• 'The Last Remnant' (PS3/X360) - Screens
• 'Medal of Honor Airborne' (ALL) - Screens
• 'Mobile Ops: The One Year War' (X360) - Screens
• 'NBA Live 08' (ALL) - Screens
• 'Ninja Gaiden II' (X360) Announced - Screens & Trailer
• 'Operation Darkness' (X360) - Screens
• 'Phantasy Star Universe: Ambition of the Illuminus' (X360/PS2/PC) - Screens
• 'SEGA Rally Revo' (ALL) - Screens
• 'Smash Court Tennis' (PSP) Coming to Xbox 360 - Screens
• 'Zoids Alternative' (X360) - Screens

Microsoft is taking a precautionary measure and voluntarily providing customers with a free retrofit to the Xbox 360 Wireless Wheel, due to a very small number of incidents of a malfunction, where a component in the Wheel chassis may in rare cases overheat and release smoke when the AC-DC power supply is used to energize the Wheel.

Already revealed by SEGA's Universe at War Live compatibility on Vista/XP, Microsoft's official Gamerscore blog confirms it is indeed working on bringing the Games for Windows Live service to XP. The development team first wanted to get the service working on Microsoft's newest OS to support Halo 2 and Shadowrun, but now that both titles are out, work on finalizing GfWL on XP has commenced. Gears of War, which is Vista/XP compatible, will support the Live service on both platforms.

A few days ago gossip magazine The Inquirer claimed that it had received information regarding the upcoming DirectX10.1 update not being compatible with current DX10 hardware. Microsoft's DirectX lead program manager Sam Glassenberg debunked that rumor as false, and confirmed that all DirectX10 enabled cards will work fine with the minor DX10.1 update, it may just be that the new features are not incorporated.

In Halo 3 Master Chief returns to finish the fight, bringing the epic conflict between the Covenant, the Flood, and the entire human race to a dramatic, pulse-pounding climax. With preorders in North America already exceeding the 1 million milestone, Microsoft has high hopes for the Halo 3 debut. Director of creative marketing Chris Di Cesare claims the goal is to reach $155 million in a single day, surpassing both Halo 2's $125 million, as well as Spider-Man 3's $151 million opening record.

Microsoft kicked off the greatest holiday lineup in video game history by announcing it will reduce the estimated retail price (ERP) of Xbox 360 by $50 (U.S.) beginning Aug. 8. Soon to follow, Electronic Arts Inc. (EA) will release its blockbuster video game title Madden NFL 08 on Aug. 14.

Massive, Microsoft's in-game advertisement provider, has signed an agreement with EA to provide in-game ads for its lineup of sports titles, such as Madden, NASCAR, Tiger Woods, SKATE, NHL etc... Microsoft has been under mounting pressure from Google, which recently acquired Adscape, as well as Double Fusion.

Microsoft revealed its latest financial results and announced revenue of $13.37 billion for the quarter ended June 30, 2007, a 13% increase over the same period last year. On the flip side, the games division recorded a $2 billion loss, mainly due to the Xbox 360 warranty policies and refunds.

It's unknown whether it has something to do with Peter Moore's departure or is simply a change in policy, but Microsoft's Aaron Greenberg revealed that its annual European "X"box press event will not be taking place this year. The X press events have taken place every year since the original Xbox, where Microsoft unveils some of its key titles, like the Halo Wars announcement at X06. However Microsoft did state that it would explore other ways to make its announcements...

EA announced that Peter Moore has joined EA as President of EA Sports. Moore joins EA from Microsoft where he served as corporate vice president of the Interactive Entertainment Business in the Entertainment and Devices Division, leading both the Xbox and Games for Windows businesses.

Microsoft released screens and trailers for its upcoming titles:

• Age of Empires III: The Asian Dynasties - Features & Screens
• Blue Dragon (X360) - Features & Screens
• Fable 2 (X360/PC) - Features & Screens
• Flight Simulator X: Acceleration Expansion Pack - Features & Screens
• Gears of War (PC) - Features, Screens & Trailer
• Golden Axe (X360) - Features & Screens
• Halo 3 (X360) - Features, Screens & Trailers
• Halo Wars [X360] - Features & Trailer
• Hexic 2 (X360) - Screens
• Lost Odyssey (X360) - Features, Screens & Trailer
• Marathon: Durandal (X360) - Features & Screens
• Mass Effect (X360) - Features, Screens & Trailer
• Project Gotham Racing 4 (X360) - Features, Screens & Trailer
• Scene It? Lights, Camera, Action (X360) Announced - Facts & Features
• Too Human [X360] - Features, Screens & Trailer
• Viva Piñata [PC] - Features & Screens
• Viva Piñata (X360) - Features, Screens & Trailer
• Zoo Tycoon 2: Extinct Animals - Features & Screens

Microsoft got to kick off the festivities of the new, slimmer E3. Announcements included Gears of War and Viva Piñata coming to the PC, exclusive online expansions for GTA IV, and details for Call of Duty 4, Resident Evil 5, and Assassin's Creed. There was even an on-stage demonstration of Harmonix's upcoming Rock Band.

Now that Sony has officially announced its PS3 price reduction, Microsoft is expected to make its next move shortly. By switching from a 90 to 65-nanometer IBM CPU and AMD/ATI graphics chip, Microsoft will be able to reduce the x360's cost, size and heat, according to Mercury News' Dean Takahashi. Codenamed Falcon, the revised X360 is expected later this fall, and could include an internal power supply, or make use of the new space to add more costly things like it did with the Elite's HDMI.

GarageGames announced the release of its next-gen XNA game engine technology Torque X, free for all XNA Creators Club subscribers. Torque X Builder is the drag-and-drop visual 2D editor and toolset which simplifies building games in Torque X.

Microsoft announced that it will expand its global Xbox 360 warranty coverage. Any Xbox 360 customer who experiences a general hardware failure indicated by three flashing red lights will now be covered by a three year warranty from date of purchase. All other existing Xbox 360 warranty policies remain in place.

Microsoft unveiled Microsoft Surface, a new category of surface computing products from Microsoft that turns an ordinary tabletop into a vibrant, dynamic surface that provides effortless interaction with all forms of digital content through natural gestures, touch and physical objects.

In an interview with eWeek, Microsoft's Entertainment and Devices Division President Robbie Bach predicted that the Xbox will become profitable during the course of 2008, "It's a business that will be profitable next year—we'll make money next year and that will be the first time, which is pretty exciting." In the subsequent years Microsoft then expect to actually make money off their console endeavor.

While Yahoo and Microsoft declined to comment, the New York Post claims to have received info from inside sources that Microsoft is once again looking to acquire Yahoo. Last year both companies were in prolonged talks, but nothing materialized. But the NYP says Microsoft has intensified its pursuit of a deal with Yahoo!, especially with Google breathing down its neck, and being outbid on recent prospects like DoubleClick and AOL.

Microsoft today announced it will be establishing a European office of Microsoft Game Studios. The European arm will focus on continuing and growing the success of MGS-published content in Europe and in building ever-deeper relationships with European development talent.